Correlation Between Direxion Monthly and Usa Mutuals

Can any of the company-specific risk be diversified away by investing in both Direxion Monthly and Usa Mutuals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Direxion Monthly and Usa Mutuals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Direxion Monthly Nasdaq 100 and Usa Mutuals Vice, you can compare the effects of market volatilities on Direxion Monthly and Usa Mutuals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Direxion Monthly with a short position of Usa Mutuals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Monthly and Usa Mutuals.

Diversification Opportunities for Direxion Monthly and Usa Mutuals

-0.6

Correlation Coefficient

Direxion Monthly  Usa Mutuals

Excellent diversification

The 3 months correlation between Direxion and Usa is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Monthly Nasdaq 100 and Usa Mutuals Vice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usa Mutuals Vice and Direxion Monthly is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Direxion Monthly Nasdaq 100 are associated (or correlated) with Usa Mutuals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usa Mutuals Vice has no effect on the direction of Direxion Monthly i.e., Direxion Monthly and Usa Mutuals go up and down completely randomly.

Pair Corralation between Direxion Monthly and Usa Mutuals

Assuming the 90 days horizon Direxion Monthly Nasdaq 100 is expected to under-perform the Usa Mutuals. In addition to that, Direxion Monthly is 3.05 times more volatile than Usa Mutuals Vice. It trades about -0.09 of its total potential returns per unit of risk. Usa Mutuals Vice is currently generating about 0.18 per unit of volatility. If you would invest  2,120  in Usa Mutuals Vice on December 20, 2024 and sell it today you would earn a total of  184.00  from holding Usa Mutuals Vice or generate 8.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Direxion Monthly Nasdaq 100  vs.  Usa Mutuals Vice

Direxion Monthly Nasdaq

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Monthly Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Usa Mutuals Vice

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Usa Mutuals Vice are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Usa Mutuals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Direxion Monthly and Usa Mutuals

The main advantage of trading using opposite Direxion Monthly and Usa Mutuals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Monthly position performs unexpectedly, Usa Mutuals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Usa Mutuals will offset losses from the drop in Usa Mutuals' long position.

The idea behind Direxion Monthly Nasdaq 100 and Usa Mutuals Vice pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.